scholarly journals The road to the 1980s write-downs of sovereign debt

2022 ◽  
pp. 1-19
Author(s):  
Edwin M. Truman
Keyword(s):  
Commercial Bank ◽  
Latin American ◽  
Sovereign Debt ◽  
Home Country ◽  
Debt Crisis ◽  
International Institution ◽  
The Road ◽  
Brady Plan ◽  
The International Monetary Fund ◽  
Case Basis

The Latin American debt crisis consumed the 1980s and was not restricted to Latin America. Starting from the August 1982 Mexican weekend, the crisis had three phases: Concerted Lending (1982-5), Baker Plan (1985-9) and Brady Plan (1989 to mid 1990s). This article describes the evolution of the debt strategy and the road to embracing debt write-downs at the end of the decade. In the absence of an external coordinating mechanism, four groups of parties had to reach agreement on any change in the strategy: the borrowing countries, their commercial bank lenders, the home-country authorities of those lenders, and the International Monetary Fund as the principal international institution. Each group could effectively veto any change in the strategy. This need for consensus is lesson number one from the 1980s for today. Lesson number two is that political economy aspects dictated that the strategy be implemented on a case-by-case basis. The article concludes with an application of these lessons to a similar, but even more global, potential debt crisis in the wake of the COVID pandemic.

The Transmission of the Great Recession (2008-2009) and the Sovereign Debt Crisis (2010-2012) to Latin America

2018 ◽  
pp. 19-42
Author(s):  
Roberto J. Santillán-Salgado ◽  
Edgardo A. Ayala-Gaytán
Keyword(s):  
Growth Performance ◽  
Latin American ◽  
Sovereign Debt ◽  
Debt Crisis ◽  
Sovereign Debt Crisis ◽  
The Great Recession ◽  
International Financial Crises ◽  
International Financial Crisis ◽  
Hypothetical Scenario ◽  
Econometric Evidence

In this work we discuss econometric evidence on four major issues that relate to the six largest Latin American economies (Argentina, Brazil, Chile, Colombia, Mexico, and Peru) during the two consecutive international financial crises between 2008 and 2012. Our first concern has to do with the mechanism of transmission of the international financial crisis and its secondary effects on the real and financial sectors of our sample countries. The second aspect that we explore refers to the actual magnitude of both, real and financial effects of the crisis. Our third objective has to do with an evaluation of the role played by individual countries' external macroeconomic vulnerability. And, finally, we propose a contra-factual analysis of the growth performance of our sample of Latin American economies, with the growth performance they would have experienced in a hypothetical scenario of no external turmoil.

The Impact of Privatization on the Latin American Debt Problem

1992 ◽  
Vol 34 (2) ◽  
pp. 93-126 ◽  
Author(s):  
Ravi Ramamurti
Keyword(s):  
Latin American ◽  
Debt Crisis ◽  
Debt Problem ◽  
The Road ◽  
All Solutions ◽  
Lost Decade ◽  
The Impact

This Study will explore the extent to which state-owned enterprises (SOEs) were responsible for creating the Latin American debt problem and, more importantly, the extent to which the present privatization of those enterprises may help to resolve that problem. In some quarters, privatization has been viewed as an essential reform needed to restore creditworthiness and growth in the region after the “lost decade” of the 1980s. Other quarters have been more skeptical, viewing it more as the latest fad to strike the region. The conclusion that will be expressed here falls somewhere in between: privatization can indeed play a part in solving the debt crisis and restoring growth, but, like all solutions, it may also create unintended problems down the road if not used carefully.

Part III Sovereign Debt Restructuring, 10 An Introduction to Sovereign Debt Restructuring

2016 ◽  
Author(s):  
Olivares-Caminal Rodrigo ◽  
Douglas John ◽  
Guynn Randall ◽  
Kornberg Alan ◽  
Paterson Sarah ◽  
...  
Keyword(s):  
New York ◽  
Sovereign Debt ◽  
Debt Crisis ◽  
Hedge Fund ◽  
Sovereign Debt Crisis ◽  
Debt Restructuring ◽  
New Developments ◽  
Unsecured Debt ◽  
Brady Plan ◽  
The Eu

This chapter starts by introducing the Brady Plan which aimed to address the debt crisis that occurred in the developing countries during the 1980s. The chapter also looks at new developments which have taken place in the area of sovereign debt restructuring since the Brady Plan. These are the EU sovereign debt crisis, and the ongoing Argentine litigation in New York. The former is a debt crisis that was originated in Greece in late 2009 and has been taking place in other Euro-areas ever since and has affected Portugal, Ireland, Spain, and Cyprus. The ongoing Argentine litigation in New York relates to a claim initiated by a hedge fund to collect on defaulted debt obligations issued by Argentina based on the breach of the pari passu clause. The pari passu clause is a standard clause in public or private international unsecured debt obligations.

scholarly journals The Baring Crisis and the Great Latin American Meltdown of the 1890s

2008 ◽  
Vol 68 (2) ◽  
pp. 462-500 ◽  
Author(s):  
KRIS JAMES MITCHENER ◽  
MARC D. WEIDENMIER
Keyword(s):  
Latin American ◽  
Sovereign Debt ◽  
Debt Crisis ◽  
Emerging Market ◽  
Institutional Factors ◽  
Sovereign Debt Crisis ◽  
Yield Spreads ◽  
Specific Effects ◽  
The World ◽  
Country Specific

The Baring Crisis is the nineteenth century's most famous sovereign debt crisis. Using a database of more than 15,000 observations, we assess its effect on emerging market borrowers and find empirical evidence of a regional crisis but not a global crisis. During the crisis, Latin American yield spreads increased by more than 200 basis points relative to the rest of the world, even after controlling for macroeconomic, trade, political-institutional factors, and other country-specific effects. Our evidence suggests that European investors may have sold off or reduced their holdings of Latin American securities in the wake of the Baring Crisis.

Orthodox and Heterodox Stabilization Policies in Bolivia and Peru: 1985-1988

1989 ◽  
Vol 31 (4) ◽  
pp. 163-192 ◽  
Author(s):  
Arthur J. Mann ◽  
Manuel Pastor
Keyword(s):  
International Monetary Fund ◽  
Latin American ◽  
Debt Crisis ◽  
Essential Elements ◽  
Monetary Reform ◽  
Short Term ◽  
Fiscal Restraint ◽  
Stabilization Policies ◽  
Imf Programs ◽  
The International Monetary Fund

With the outbreak of the Latin American debt crisis in late 1982, nervous bankers and hard-pressed debtors turned to the International Monetary Fund (IMF) for both short-term finance and macroeconomic advice. By 1985, however, steadily increasing inflation and stagnant output reduced what little appeal such orthodox IMF programs had ever enjoyed. In late 1985 and early 1986, Argentina and Brazil adopted new “heterodox” stabilization programs, whose essential elements included income policies to break inflationary inertia, monetary reform (especially the creation of new currencies), and a verbal commitment to fiscal restraint.

Sovereign Debt Default

2017 ◽  
Author(s):  
Giselle Datz
Keyword(s):  
Latin American ◽  
Sovereign Debt ◽  
Debt Crisis ◽  
Theoretical Work ◽  
Secondary Markets ◽  
Political Costs ◽  
Recent Theoretical Work ◽  
Domestic Debt ◽  
Debt Default ◽  
Domestic Banks

Sovereign borrowing and debt default have long been a part of a nation’s existence. Sovereign debt defaults (that is, the suspension of interest or principal payment on due debt) were common from the sixteenth century, when Edward III declared a default after military defeat in 1340, to the nineteenth century, when Latin American countries defaulted on some of their debts. Early loans were made in the form of repayable taxes until the system evolved to allow for sovereign loans, transparent enough that secondary markets for these debts were soon developed. A government may default on its debt due to unwillingness or inability to pay. In both cases, default is a difficult political decision whose real costs remain somewhat ambiguous from a theoretical standpoint. The costs of default are often contingent on the type of debt restructuring deal reached between the debtor and the creditor. The scholarly literature on sovereign debt crises is substantial, particularly with respect to the economic, legal, and political costs of default. More recent theoretical work has focused on the trend toward increased domestic debt, which is expected to help reduce the probability of a debt crisis. However, domestically issued sovereign debt can lead to other types of risk. While relying on domestic institutional investors in local economies can help smooth cycles of liquidity shortages, over-reliance on those investors (particularly pension funds) can undermine the solvency of domestic banks and social security arrangements.

The Road to the Baccalaureate

2020 ◽  
Vol 10 (2) ◽  
pp. 420-442
Author(s):  
Dina Ghazzawi ◽  
Lyle McKinney ◽  
Catherine Lynn Horn ◽  
Vincent Carales ◽  
Andrea Burridge
Keyword(s):  
Latin American ◽  
Academic Preparedness ◽  
African Students ◽  
Bachelor Degree ◽  
Caribbean Students ◽  
The Road ◽  
Community College District ◽  
Starting Point ◽  
Delayed Enrollment ◽  
Sub Saharan

International students are increasingly enrolling in U.S community colleges as a starting point to their higher education. However, limited research examines the factors contributing to their successful transfer to a 4-year institution and bachelor degree attainment. Utilizing longitudinal transcript data from a large community college district in Texas, this study uses hierarchical logistical regression to compare college experiences and transfer outcomes based on region of origin. Findings demonstrate that while Sub-Saharan African students have a significantly higher probability of transfer than Asian and Latin American students, the majority of bachelor degree recipients were Asian students graduating in STEM fields. Delayed enrollment into college and academic preparedness in math were negatively associated with transfer for Latin American and Caribbean students.

Sorting Out the Mixed Economy

2019 ◽  
Author(s):  
Amy C. Offner
Keyword(s):  
Latin America ◽  
Latin American ◽  
New Deal ◽  
The United States ◽  
Business Associations ◽  
Welfare Programs ◽  
The Road ◽  
Social Welfare Programs ◽  
The Third World ◽  
The New Deal

In the years after 1945, a flood of U.S. advisors swept into Latin America with dreams of building a new economic order and lifting the Third World out of poverty. These businessmen, economists, community workers, and architects went south with the gospel of the New Deal on their lips, but Latin American realities soon revealed unexpected possibilities within the New Deal itself. In Colombia, Latin Americans and U.S. advisors ended up decentralizing the state, privatizing public functions, and launching austere social welfare programs. By the 1960s, they had remade the country's housing projects, river valleys, and universities. They had also generated new lessons for the United States itself. When the Johnson administration launched the War on Poverty, U.S. social movements, business associations, and government agencies all promised to repatriate the lessons of development, and they did so by multiplying the uses of austerity and for-profit contracting within their own welfare state. A decade later, ascendant right-wing movements seeking to dismantle the midcentury state did not need to reach for entirely new ideas: they redeployed policies already at hand. This book brings readers to Colombia and back, showing the entanglement of American societies and the contradictory promises of midcentury statebuilding. The untold story of how the road from the New Deal to the Great Society ran through Latin America, the book also offers a surprising new account of the origins of neoliberalism.

European Economies Stability Faced With Potential Outburst of Sovereign Debt Crisis. An Empirical Study Using Neural Network

2013 ◽  
Vol 12 (2) ◽  
pp. 3255-3260
Author(s):  
Stelian Stancu ◽  
Alexandra Maria Constantin
Keyword(s):  
Neural Network ◽  
Sovereign Debt ◽  
Debt Crisis ◽  
Banking System ◽  
Sovereign Debt Crisis ◽  
European Level ◽  
Continuous Growth ◽  
Economic Context ◽  
European Economies ◽  
The Impact

Instilment, on a European level, of a state incompatible with the state of stability on a macroeconomic level and in the financial-banking system lead to continuous growth of vulnerability of European economies, situated at the verge of an outburst of sovereign debt crises. In this context, the current papers main objective is to produce a study regarding the vulnerability of European economies faced with potential outburst of sovereign debt crisis, which implies quantitative analysis of the impact of sovereign debt on the sensitivity of the European Unions economies. The paper also entails the following specific objectives: completing an introduction in the current European economic context, conceptualization of the notion of “sovereign debt crisis, presenting the methodology and obtained empirical results, as well as exposition of the conclusions.

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